In case you’ve never heard of them, Bitcoins are a decentralized digital currency based on peer-to-peer Internet connections. The Bitcoin system relies heavily on cryptography and has a nifty feature where the transaction log is stored by everyone so that transactions can be verified by a safety-in-numbers approach. Also, it takes computational “work” to update the transaction log (called a block chain), so forgery is difficult and becomes impossible the more time passes after a transaction. It’s quite clever – you can read more about it on the Bitcoin Wiki page.
If you’ve read my book, Zero Calvin, then this concept might sound familiar. In Zero Calvin, I describe an artificially-intelligent computer network called Ariel (think if it as Google on steroids), which has an economic component to it called Karma. This system is composed of several nodes that store information and crunch data redundantly across the nodes. Any information or decision can therefore be verified by checking it against several other random nodes. How cool is it that the Bitcoin chaps have created a way to make this kind of system a reality?!?!
By the way, I do not own any Bitcoins and have no plans to purchase (or “mine”) any in the future. I urge you to use your own discretion if thinking of spending any “real” money on them. In my opinion, it’s better to buy hard assets like gold, silver, or land. I know that may sound odd considering this is a step towards my utopian vision, but it is still a new and often misunderstood system and the simple fact is that people don’t really trust electrons, so I’m doubtful of its ultimate mainstream adopt-ability. I’m also freaked out by the thought that if I lost my Bitcoin “wallet” then it’s game over – that money simply disappears from circulation forever.
With that said, I am still hoping for Bitcoin to succeed and bring us all one step closer to a Zero Calvin world.
Oh, by the way, the creator of Bitcoin goes by the pseudonym Satoshi Nakamoto, but we all know who the real creator must be – and his initials are K.B.